the push toward thinner, lighter and stronger packaging continues in the baby diaper market, where manufacturers are keeping up with consumer demands for lower prices, larger counts and increasingly identifiable products

In the baby diaper market, good things come in small packages. And large packages. And durable, colorful and easy-to-carry packages. No longer designed to merely attract consumers, these days the latest bells and whistles in packaging are used to keep customers satisfied through the addition of other benefits such as convenience, information and price incentives.

A cursory stroll down the diaper aisle of just about any retail store confirms that, in order to compete, producers need to put their “best face” forward on shelves that are literally packed with packages. So just what are diaper makers doing to stand out from the crowd? With raw materials being an obvious starting point, it’s somewhat surprising that, while there are many ways to distinguish a product, most manufacturers reported that the use of new and different packaging materials is not one of them. “Raw materials haven’t changed considerably,” said Matthew Rinaldi, director of marketing for private label diaper manufacturer Arquest, Cranbury, NJ. “Most manufacturers are using a plastic flexographic polybag and this has been the case for the past several years,” he added.

G.M. Olita, commercial director for automated bagging machine supplier Amotek, Bologna, Italy, also pointed to a status quo situation on the raw material front. “There haven’t been any raw material changes significant enough to warrant alterations to packaging machinery design,” he commented. Mr. Olita went on to say that one area where raw materials have played an important role is at the end product level, where they allow for improved absorption and thinner diapers, which ultimately reduces packaging dimensions.

One manufacturer witnessing a recent transition in secondary packaging materials in the European sector was Jesper Dobel, director of sales for packaging machinery specialist Gevas Verpackungsmaschinen GmbH, Halle-Westfalen, Germany. “One radical change is from cardboard boxes to PE film wrapping. With the use of compression, four-sided wrapping and sealing, the supermarket gets the same hygienic product packaging but doesn’t have the problem of getting rid of the cardboard boxes used for shipment. Diaper manufacturers will see a huge savings in production costs, logistics, storage and machine manpower.” Mr. Dobel went on to explain that the most common secondary packaging method in recent years has been to group individual poly-bagged packs in corrugated cardboard boxes, which were then stacked, shrink wrapped and placed on a palette for transport. “Many European companies are already transitioning to PE film and many more are considering it,” he said.

Giampiero De Angelis, commercial director for manufacturing and packaging equipment supplier Fameccanica.Data SpA, Chieti, Italy, also described a steady market for poly bags. “In spite of an increasingly aggressive environmental movement, poly bags will be on the shelves for a long time. Degradable materials and paper have been tried and tested without success,” he said.

Taking up the issue of raw material pricing was Robert van der Laan, sales manager at Delo&Mediane International, Maarssen, The Netherlands, a hygiene packaging film supplier. “After some years of a relatively stable price level for LDPE resins in Europe, we have seen an increase of about 40% in the past eight months,” he explained. “This price increase has been the major motivation for our customers to look into alternative bag styles with less PE (weight), downgauging bag and handle thickness by using alternative PE grades.”

Packaging With A PunchIf manufacturers aren’t using raw materials to distinguish themselves, then just what are they doing to make a splash in the market? One leading branded diaper manufacturer, Procter & Gamble, Cincinnati, OH, is currently taking a swing at co-packaging as a new marketing approach. “We now offer an on-pack sample of ‘Pampers’ wipes on our newborn ‘Baby-Dry’ diaper packs,” said company spokesperson Tami Jones. “The sample is tipped onto the outer package and placed on the panel at the top of the diaper package,” she explained. The obvious advantage of this strategy is that it allows consumers, who may be new to the brand, to try another Pampers product.

Another company putting a new twist on things is Arquest, which now offers a combo-pack exclusively for Toys ’R Us stores. “The carton includes three packages of diapers and two packages of wipes, offering the consumer a usable inventory of quantity rather than a trial or sample pack of wipes,” said the company’s Mr. Rinaldi.

At baby diaper manufacturer Drypers, Houston, TX, a key innovation is a daycare ID box, which appears on all Drypers diaper packages. “This allows parents to place their child’s name directly on the diaper package,” explained Carrie Schnell, Drypers’ director of marketing. “This feature was actually generated by a suggestion we received from a mother who was using masking tape to identify her child’s diapers for her daycare center,” said Ms. Schnell.

Daycare ID boxes exemplify diaper packaging’s growing and increasingly noticeable role as a channel of communication between consumers and manufacturers. “An important function of the packaging is to provide customers with the information they’re seeking,” commented P&G’s Ms. Jones. “This means that customer needs are being met on the packaging and their questions are being answered. We strive to offer increased convenience for consumers and the trade. Packaging needs to be durable and cost-effective and we are always looking for ways to offer consumers more information along with an increasingly attractive package,” she said.

A similar story was told by Mark Scott, marketing director for North American disposable diaper business at market leader Kimberly-Clark, Dallas, TX. “Across the industry, as product improvements are introduced, violators on the package are used to inform consumers of key upgrades.” As an example, Mr. Scott pointed to the ‘Huggies’ package, which features a yellow circle with information about the company’s ‘Breathe Dry’ system. “We’re very aware of the importance of communicating product information to consumers,” he said.

In the store brand sector, packaging serves a similar purpose, according to Arquest’s Mr. Rinaldi. “Our primary interface with the customer is through our packaging. We don’t have a lot of dollars to spend on major advertising campaigns. Especially in the private label sector, packaging is a key marketing vehicle,” he said.

Is Bigger Always Better?If there are two sides to every story then this is particularly true in the area of package size where there is a clear split between larger packages in North America and smaller ones in Western European regions. “Diaper packaging varies dramatically among different geographies,” said Fameccanica’s Mr. De Angelis. “Advanced countries are highly comparable in terms of counts, pack dimensions, materials and pattern, while less advanced markets, where counts are smaller, have completely different characteristics,” he explained.

Although it may not be the case in other parts of the world, for U.S. consumers, bigger is definitely better, and in response manufacturers across the board are pointing to a dramatic shift toward larger diaper packs. It’s clear that customers in North America are looking for more for their money, shopping in bigger stores and buying just about everything in bulk quantities, including diapers. In addition to the increased popularity of warehouse-type stores such as Sams’ Club and BJ’s (which offer “club packs” that are four to six times larger than convenience size packages), mass merchandisers are moving away from convenience packs to mega and jumbo sizes, while food and drug stores are seeing increased movement toward jumbo packs.

From the point of view of the manufacturer and the retailer, this is good news: larger sizes mean heightened customer loyalty. If consumers buy a jumbo pack, for instance, they are twice as loyal to the store and the brand than if they purchased a convenience pack. Taking this logic one step further, retailers are then less affected by competing promotions if customers have already purchased enough diapers for a long-term period.

Ms. Schnell of Drypers quantified the situation. “In 1999 at the grocery level alone, convenience packs dropped 34% to represent 32% of the category on a per pad basis, with jumbo packs holding a 48% lead and mega making up 18% of the category,” she said. Ms. Schnell added that club packs trailed with a mere 1.6%, which is indicative of crowded grocery shelf space.

K-C’s Mr. Scott described similar results and said that in the North American region consumers continue to trade up to larger packs. “During the fourth quarter of 1998 about a third of all diapers sold were in a convenience pack format compared to the fourth quarter of 1999 when only about 20% of all diapers were sold in this format. Currently almost half (46%) of all diapers sold in the U.S. are sold in the jumbo pack size package.”

Liam Buckley, vice president sales and marketing for packaging equipment supplier Rose Forgrove, West Yorkshire, U.K., offered his perspective on the trend toward larger packages. “In North America, the trend is ever-larger packs and carry handles, while the rest of the world still offers smaller packs. Larger packs are driven by consumer demand while smaller packages in third world countries are a result of economics. Price reduction continues to be a goal and cost concerns have changed some pack styles outside of North America,” he said. Mr. Buckley added that the U.S. market is also switching to larger packs of wet wipes with recloseable packs.

Drypers’ Ms. Schnell suggested one reason for the shift toward bigger packages. “Convenience packs, which have traditionally been wrapped around a price point, no longer represent a week’s supply of diapers. On the other hand, not everyone can afford to buy bigger, so convenience packs are still an important option for many consumers. Internationally, packs are smaller. South and Latin America, for instance, are not fully penetrated, which means that some people are still using cloth diapers. Customers in these regions may purchase smaller packages of diapers for trips or overnight use. In the U.S., 90% of diapering households are using disposable diapers,” she said.

The Other Side Of The StoryPietro Tama, general manager of packaging and sealing machine supplier Komer Srl, Sambuceto, Italy, also commented on dichotomous package sizes across geographic regions. “In industrialized countries where consumers have higher incomes, the number of pieces per package is larger. In fact, in underdeveloped countries with low incomes, this number drops to one quarter of industrialized countries,” he said.

Mr. De Angelis of Fameccanica concurred. “Recent trends go toward compact packs, a requirement that was initiated in the U.S. and Western Europe a few years ago and is driven largely by issues of shelf space and warehousing and transport costs. In Western countries, by contrast, a combination of two major factors—cost savings and the increasing diffusion of the so-called ‘Great Distribution’ via ‘hypermarkets’—have boosted sales of double or economic packs and, more recently, in club packs in cardboard boxes,” he commented.

A similar comparison was offered by Mr. van der Laan of Delo&Mediane. “In Western Europe the trend is to double stack packs, which are mostly sold through supermarkets. In Eastern Europe diaper counts are generally kept low and packed into small units since diapers are sold in drugstores and kiosks on the street. Price per unit is still an issue in these countries,” he said.

Smaller packages were also on the mind of Gevas’ Mr. Dobel. “After some years with increasingly large counts in the bags, producers are starting to reduce counts. This is mainly driven by the fact that many supermarkets are offering a bag of diapers for ‘x dollars’ and the consumer is not focused on the number of diapers in the bag. Also driving lower counts in Europe is the fact that many producers are trying to enter the former East Block and Russia. Due to reduced buying power in these countries, this can only be achieved through low count packs that are sold at a low price,” he said. Mr. Dobel went on to say that another driving factor in Europe could be that most consumers—who are in the supermarket at least three times a week—don’t need to have big bags of diapers at home.

From a machinery point of view, smaller packages mean faster and better performing systems. According to Amotek’s Mr. Olita, “the move toward smaller counts in the European market necessitates increasingly fast machines that perform well.”

Juergen Schaefer, director of bagging machinery specialist Optima Maschinenfabrik, Schwaebisch Hall, Germany, agreed, pointing out that machinery needs to be as flexible as possible. “From low counts at high speeds to jumbo bags at lower speeds, everything goes. Although Latin American and Far Eastern producers may request systems that can bag three to five diapers, these machine needs to be versatile enough to also run, say, 28 counts,” he said.

Judging A Book By The Cover In terms of graphics, color updates and printing improvements, manufacturers are doing whatever it takes to make packaging as attractive as possible to consumers. For instance, Ms. Jones of P&G referred to color as an important vehicle of brand identification. “We strive to have a clear distinction between our three baby diaper brands—‘Rash Guard’, ‘Pampers Premium’ and ‘Baby Dry’. The ribbon on our packaging is a way of distinguishing among our products, which share a similar green packaging theme,” she said. Ms. Jones added that, despite regular updates to packaging, one thing remains the same—Pampers products continue to prominently feature a familiar face. “The baby we use on our packaging is the same baby that was introduced 30 years ago in 1969,” she added.

Delo&Mediane’s Mr. van der Laan stressed the importance of top quality printing and explained that most diaper designs feature eight-color printing. “After the boy/girl phase (during which all producers were juggling with pink, blue and different colors to identify all the various references and bag counts), the return to unisex has simplified matters again. Skin tones and consistency of color shades remain important,” he said.

Drypers’ Ms. Schnell also discussed the shift toward unisex products. “This trend has now been fully implemented, with ‘Huggies’ and private labels being the last hold-outs. This change affects packaging colors because manufacturers need to appeal to parents of both girls and boys. Unisex products provide the most efficient movement on the shelf and, as one of the first producers to go unisex, we’ve found purple—our primary packaging color—to be a highly effective unisex color,” she said. Ms. Schnell went on to explain that, in the training pants area, most branded and private label products are still gender-specific due to the fact that potty training toddlers are more aware of their gender and, consequently, identify with gender-specific designs.

Arquest’s Mr. Rinaldi also cited an increased use of six to eight colors, pictures and intricately designed graphics in the private label sector. “We are seeing a trend away from knock-off packaging. While historically retail brands have offered take-offs of branded packaging, we are now seeing retailers develop their own brand or image. In fact, the term ‘private label’ is actually somewhat passé—now they are referred to as ‘corporate brands,’” he said. Mr. Rinaldi added that, particularly in the mass merchandise sector, many retailers are not even putting their name on the package. “Overall, this has led to more complex printing,” he said, “with private label diaper makers spending more money on the development of more detailed artwork than ever before.”

The Bottom LineDespite such updates, cost remains a key issue and manufacturers are continuing to strive to make the most of their packaging dollars. P&G’s Ms. Jones referred to cost-saving improvements as a driver for recent packaging trends. “Improved film performance has led to thinner packaging, less waste and an overall cost reduction. Our packaging includes 25% post-consumer recycled materials that are derived from recycled milk jugs,” she said. P&G has also moved from roll stock to wicketed materials in an effort to improve performance and reduce costs.

Optima’s Mr. Schaefer characterized cost-effective packaging as critical in today’s competitive marketplace. “For this reason, diaper companies will always look in the direction of cost improvements. Cost reductions may come in the form of reduced gauge bag material, higher yield raw materials or the reduction of waste and delay on the production line,” he said.

According to Mr. Buckley of Rose Forgrove, cost concerns are driving a trend toward pre-printed roll stock polyethylene bags in areas beyond North America. “Flow wrap packaging is generally considered the low-cost solution for wet wipes, diapers or feminine pads. The ability to use polyethylene from roll stock as opposed to pre-made bags presents cost savings on a per-pack basis,” he said.